Adding value by integrating Sustainability analysis

Ranking makes risks visible
The financial crisis and recent turmoil, especially in Middle Eastern countries, has cast doubt on the accuracy of traditional analysis on identifying country risks. Standard data does not give the true picture of how sustainably a nation is run or where risks might appear from a broad range of perspectives, including corruption, social stability and aging. Such factors differ between countries and our Country Sustainability

We differ in the weight we give to governance factors
We start from the perspective of an investor and spend time collecting data on environmental, social and governance factors that we find relevant from this viewpoint. This is a disciplined process that structures a wide range of sources of information to present a total score.
Our choice of data is based on a bottom-up collection of what we require as investors and therefore differs from existing ESG analysis. The most outspoken difference is in the weight we give to governance factors.

Country sustainability ranking helps in our investment decisions
First and foremost, the analysis of 59 countries from a sustainability perspective provides additional information to the investment process. The data and resulting Country Sustainability Ranking are updated twice a year. These results are discussed by our investment teams and form an integral part of the country profiles that are used in our investment decisions. This helps in identifying risks, but also in distinguishing opportunities, for instance in an emerging markets universe. In a recent study we have analyzed the added value of sustainability information in building portfolios of government bonds, with promising results.
Robeco would like to share these insights with you in the IPE Webcast, on November 12th 2013.

Long/short factor strategies allow well-documented factor premia to be harvested and hedging out market risk effectively cancels a major source of risk. Market-neutral factor strategies can be useful additions to portfolios with strong market exposure due to low correlation with directional market risk. In this webcast, Eric Shirbini, PhD, Global Research and Investment Solutions Director with ERI Scientific Beta, will explore the following points:

• The challenges of a robust performance approach in the case of long/short multi-factor strategies
• Improving factor spreads without sacrificing performance stability: the challenge of allocating between factors adapted to long/short strategies
• How to ensure real market neutrality of long/short factor strategies
• The importance of investability of long/short strategies in factor investing

Should global growth and interest rates move durably higher, professional fixed income investors will need to reassess their course and look for short duration and specialized solutions. During this webcast NN Investment Partners sets out two growth scenarios and their impact on a wide range of fixed income assets. NN Investment Partners will focus on two interesting asset classes that yield compelling returns for those willing to look for them:

In this webcast Boyan Filev, Co-Head of Quantitative Equities, Aberdeen Asset Management, will discuss the various smart beta methodologies that exist and how these impact investment outcomes. He will cover a broad range of topics including:

· Multifactor vs. single factor approaches
· The impact of using optimisation techniques
· The size of the investment universe
· Frequency of rebalancing
· Benefits of integrating ESG

Practical Insights on the Rise of Transparency Considerations in Asset Allocation

Investor priorities have shifted since the 2008 financial crisis, but one trend is clear: transparency has become paramount.

As investor appetite for non-correlated assets grows apace, the volume and complexity of alternatives in their portfolios is burgeoning. In order to obtain a level of transparency similar to that available for their traditional long-only investments, they need to overcome the challenges of monitoring, valuing and reporting on this comparatively opaque and illiquid asset class.

The webcast will:

• Review the key findings from Northern Trust/Economist Intelligence Unit’s recent survey of 200 asset managers and institutional investors on the rise of transparency considerations in asset allocation
• Share examples of how investors and managers are managing these considerations
• Explore the role of data in the management process and discuss who ultimately takes responsibility for transparency

The US private debt market is a large, mature market with the opportunity for investment grade quality debt. Ease of issuance and availability has attracted issuers globally, which can add significant geographic diversification to a portfolio. Name, sector, and structural diversification also can help make US private debt an important diversifier in an otherwise all-public bond portfolio. In addition to diversification benefits, the US private placement market offers a complement of structural protections along with several sources of yield enhancements.

The private placement market in the United States is dominated by life insurance companies, resulting in an investor base with similar investment needs and risk tolerance levels. In Europe, investors tend to be less homogenous and can include banks, asset managers, and insurers, among others. The diverse investor base tends to result in a market replete with deals lacking many of the characteristics sought by insurers.

In this webcast, Alexander Alston will discuss why US private placements can be appealing to European insurers, despite the increased prevalence of European markets. Also, David Ramroop, Head of Investments at Just Group, will discuss their approach to investing in private placements.

Active currency strategies can generate positive real returns that are uncorrelated to traditional asset classes, yet they are underutilized and often misunderstood. Contrary to conventional wisdom, currencies exhibit strong fundamental value reversion—stronger, in fact, than equity or bond markets—but a fundamental valuation framework must be married with additional investment disciplines, such as game theory, to produce superior investment results. In this webcast, Thomas Clarke, a portfolio manager on William Blair’s Dynamic Allocation Strategies (DAS) team, will explain the fundamental drivers of exchange rates and discuss the macro-thematic and geopolitical forces influencing opportunities in currency markets today.

This is the third in a series of three webcasts looking at Solvency II from the point of view of the insurance company CIO in which we address the investment management opportunities in real assets for insurance asset owners.

Eugene Dimitriou is Head of Insurance Solutions at Columbia Threadneedle Investments. He has responsibility for structuring investment solutions for insurance clients, which range from improved strategic asset allocation to capital optimization of their balance sheet under Solvency II, as well as risk mitigation strategies.

Prior to joining the company, Eugene worked at PIMCO, where he was a Senior Vice President for insurance clients in Europe, leading the Solvency II implementation across the business.

Patrick Liedtke:

Patrick Liedtke, Managing Director, is BlackRock's Head of the Financial Institutions Group (FIG) for Europe, Middle East and Africa. He is a member of the global FIG Executive Committee and the global Institutional Client Business Leadership Committee.

Prior to joining BlackRock in 2012, Patrick was the Secretary General and Managing Director of The Geneva Association, a position he held starting in January 2001.

Ravi Rastogi:

Ravi joined Mercer from Towers Watson, where he was the EMEA leader of the Insurance Investment Advisory Group. Prior to that, he held senior pensions and insurance advisory positions for a number of leading firms. He has over 25 years of financial industry experience and is a qualified actuary

Analytic Investors, one of the investment teams within Wells Fargo Asset Management, is a leading expert and pioneer in factor based investing and strategies designed to outperform the market with less downside risk. Our strategies are based on strong academic evidence and utilise time-tested quantitative techniques that combine responsive, disciplined individual security selection with unparalleled risk management.

Please join us as we explore two different techniques to reduce equity risk without sacrificing equity returns. Over the past eight years, strong equity returns and low fixed income yields have led investors to reevaluate their equity risk exposure and adjust asset allocations by incorporating strategies like low volatility equity and long/short equity. As a result, these kinds of factor-based investing strategies have become more mainstream and gained the respect of many institutional clients and consultants. We will explain the academic foundation to this style of investing and highlight how investors can utilise these strategies to reduce equity risk without sacrificing long term returns. We will also discuss scenarios in which these investment styles tend to win and lose, benchmarking issues, and common misconceptions.

Currency volatility can have a significant impact on the risk /return profile of a diversified investment portfolio. Inefficiencies in implementing and managing a currency hedging strategy on a cyclical basis could also result in negative impacts.

Measuring exposure to foreign currencies, monitoring any changes and managing this risk on a continuous basis raises various considerations. Not only do you need to define your investment and risk objectives, but also to consider operational risks, cost constraints and regulatory compliance. It is equally important to know the market and assess risk and opportunities specific to the global foreign exchange market.
Our currency experts can help you find the right balance between risk and return, guide you on how to establish a robust currency management programme and how to manage related costs in an efficient manner.

At HSBC, we can help you address these challenges with an innovative and tailored approach to outsourcing currency hedging activities. This allows financial institutions, both asset managers and institutional investors, to focus on core investment activities.

It is time to re-think your currency management strategy. Find out more - http://www.gbm.hsbc.com/solutions/markets/fx-currency-management

This is the second in a series of three webcasts looking at Solvency II from the point of view of the insurance company CIO.

DETAILED AGENDA

Introduction
Rates are low, spreads are tight, and Solvency II is constraining the ability of insurers to pursue the credit investment strategies employed in the past (such as securitisations)

Economic backdrop
Where are we in the credit cycle, and what it means for the most attractive maturity segments on the credit curve, sector biases, and preference for strong covenants and/or senior secured loans

What strategies work best under Solvency II
Outright loans tend to be more attractive than securitisations
Short-dated credit is more attractive than long-dated credit
Sub-investment grade can be attractive

ALM perspective
For life companies, duration management is key. Alternative FI (e.g. loans) often bear a floating rate, which needs to be swapped to match liabilities
One comment about the matching adjustment for annuity writers

This is the first in a series of three webcasts looking at Solvency II from the point of view of the insurance company CIO.

The second and third will focus on alternative fixed income and real assets respectively.

How suitable - or otherwise - are the current capital charges and what can we expect from the 2018 review?

Solvency II was conceived in a normal yield environment; that, of course has changed and this is one reason for the review planned for 2018. Insurers are interested in the agreed thinking of what these should be and the prospects of them being amended to a level more representative of the associated risk. What is reasonable and what can we expect?

What might the political obstacles be to, say, making a distinction for capital charge purposes between Spanish and UK government bonds?

The impact of regulation on investment strategy

We will explore the relative impact of matching adjustment, volatility adjustment and transitionals and the impact on investment strategy as a result.

Consolidation

How are insurance asset owners coping with the new regulation generally? Can we expect consolidation among insurance asset owners because of the increased regulatory burden?

Use of internal models can lead to lower capital requirements, but they are very expensive to create, and are thus likely to be the preserve of the larger insurance companies.

Smaller firms might club together to enable them to access certain types of investment, and might ultimately see acquisition by a larger firm as the only way both to do this on a consistent basis and manage the increased regulatory burden. Furthermore, a common regime across Europe should make it easier for potential buyers to assess exactly what they are buying.

Other regulatory factors

What will be the impact on investment regulation of Brexit on UK regulation, and on the investment management of insurance assets?

What can we learn from other regulatory regimes from an investment standpoint?

As investors continue to migrate toward private assets in search of potential benefits like low volatility, differentiated sources of income and uncorrelated returns, they are faced with an increasingly broad universe from which to choose.

As they wade through a sea of private equity and debt options, it is becoming apparent to many investors that all private assets are not created equal.

Increasingly, origination – an investment manager’s ability to source a large quantity of high-quality investment opportunities – is becoming the difference between underperformance and outperformance.

In this webinar, we will discuss the important role that origination plays when it comes to achieving attractive long-term, risk-adjusted returns and income streams in:
- Private Credit
- Private Equity
- Infrastructure Debt
- Private Real Estate Investments

We take a fresh look at factor-based investing, examining how investors can enhance portfolio construction through a more efficient and intentional approach to sourcing potential excess returns.

Given the challenging return environment so far this year, and the outlook for more muted returns than we've seen recently, it is imperative that portfolios are constructed efficiently. That means sourcing factor returns (which our research identifies as the main driver of excess returns) more effectively. It also means consolidating exposure to only the highest conviction opportunities.

In this webinar we will explore:

- The persistence of factor returns
- Analysis and deconstruction of factor exposures in live portfolios
- Ways to construct or pivot your portfolio for better outcomes

Liquidity is starting to become a significant issue for institutional investors. The impact of a difficult mix of market trends, a sustained low interest rate environment and the unintended consequences of certain regulations are all helping to make cash an increasingly problematic asset class to deal with.

Whether seeing to obtain a return on your un-invested cash or liquidity to support investments, the environment is only likely to get more challenging.

The webcast will:

- Share examples of the different techniques which a range of institutional investors are employing to address this liquidity conundrum
- Shed light on emerging techniques such as portfolio stress-testing and liquidity budgeting
- Provide practical insights into how you can ensure a balance of security, liquidity, yield and operating efficiency

Investors increasingly are looking outside traditional government bonds in order to generate acceptable yield in what is a historical low-yielding environment.

Emerging Market Debt (EMD) has been a significant beneficiary of this reallocation. In spite of this, yields for EMD remain significantly elevated in comparison to their developed market peers, and in line with their longer term historical averages.

Much of this capital has been placed into more traditional EM issuers which in itself concentrates investors’ risks. Looking at benchmarks, the most consistent and superior long-term risk/reward outcomes in euro terms have tended to be generated by a blended allocation to hard currency, local currency and corporate EMD.

Given the significant differences in correlation of hard, local and corporate EMD versus traditional fixed income, this active and blended approach could provide investors with diversification from core fixed income holdings whilst capturing the higher yields on offer.

James Webb, Global Head of Business Development of Currency Administration; Samarjit Shankar, Managing Director, Senior Globa

Heightened volatility in the foreign exchange ("FX") markets has increased the level of risk that companies face. Managing currency exposures inherent in the globally diversified portfolios is now front and center for many firms, including alternative fund managers as a topic of interest, particularly among oversight boards with fiduciary responsibility.

BNY Mellon’s Currency Administration group provides an outsourced passive currency hedging service that helps companies manage the currency risk of their international portfolios. In this seminar we will discuss how hedge programs may help reduce the operational and financial risk of foreign currency exposures.

EDHEC Risk Institute has been conducting research for several years on the possibility of reconciling financial and environmental performance. The launch of a new series of low carbon indices by ERI Scientific Beta, the smart beta index provider set up by EDHEC Risk Institute in 2012, marks the practical realisation of these research efforts and represents an important moment for responsible finance, because the results of the research undertaken will provide institutional investors with smart beta indices that can reduce the carbon footprint of their equity investments by more than 80%, while at the same time outperforming traditional market indices and being able to create more than 50% additional value in the medium term.

EDHEC Risk Institute's approach can be distinguished from numerous approaches that, over the long term, hope to outperform the stock markets through the higher returns of shares in firms that have a better carbon footprint, because these firms are supposedly less affected by the increasing cost of fossil fuels and the tons of carbon emitted, but that, in the short and medium term, aim to produce performance that is fairly similar to that of traditional stock market indices.

This webcast channel is for pension funds and other institutional investment professionals in Europe, the USA and Asia. It is particularly relevant for pension fund executives, trustees, consultants and investment managers. IPE will be bringing its community live interviews with leading figures in the market, hosting roundtable discussions on specific topics such as asset allocation and also sharing latest thought-leadership from investment experts.